Coronavirus and Financial Services Disputes - part 3

What do you need to know? #3

This is our third note dealing with issues arising from the Coronavirus outbreak which may be of interest to those dealing with financial services disputes and litigation.

Whilst COVID-19 continues to present practical difficulties for those involved in disputes, the Courts are ready and willing to hear matters where possible. In a recent decision of John Kimbell QC, sitting as a Deputy High Court Judge, the Court refused an application to adjourn a trial owing to COVID-19 issues. Deputy Judge Kimbell QC's judgment provided that the Court's experience of conducting remote trials so far, is that they have been successful, even when the proceedings involve multiple parties and in excess of ten witnesses. That said, the Courts do recognise that parties may need to extend judicial directions and rules have been relaxed in this regard. Looking beyond the Courts, we continue to see a high level of engagement from regulatory bodies on issues arising from COVID-19 and increasing commentary relating to the fraudulent activity that is also arising.

The Court Service

Courts continue to remain open for business. Experience tells us that whilst the Courts are unilaterally adjourning some hearings, the number of hearings being concluded by telephone and video conference is increasing. The Court Service website continues to update guidance on telephone and video hearings during the Coronavirus outbreak, with the latest guidance being updated on 22 April 2020.

PDZ came into force on 26 March 2020 and provided "All proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed for a period of 90 days from the date this Direction comes into force". The Amendments include clarification that:

"the stay which PD 51Z imposes on possession proceedings does not apply to a claim against trespassers to which rule 55.6 applies"

"parties to possession proceedings can make applications for case management directions where they are agreed by the parties"

"the stay which PD 51Z imposes does not preclude the issue of claims, but simply stays claims"

The Financial Ombudsman Service

On 14 April 2020, FOS released issue 151 of Ombudsman News. The issue looks at FOS' plans and budgets for 2020/2021, FOS's new award limit of £355,000 as well as service updates arising from COVID-19.

On the issue of "COVID-19 Scams", FOS noted reports of scam emails about free school meals and separately, text messages purporting to be from the government. It is unclear whether FOS has been asked to determine disputes arising from such scams.

The Financial Conduct Authority

The FCA continues to engage with industry issues arising from COVID-19. Recent publications include coverage of:

the FCA's expectations of firms when dealing with the need for 'wet-ink' signatures (20 April 2020). The FCA noting "our rules do not explicitly require wet-ink signatures in agreements, nor do they prevent firms from using electronic signatures in agreements"; and

the FCA's confirmation of support for motor finance and high-cost credit customers (24 April 2020). The FCA noting "The targeted temporary measures being implemented are a 3 month payment freeze for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements. For high-cost short term credit (including payday loans) payments will be frozen for one month with no additional interest to be charged." This confirmation was provided following the confirmation of a package of temporary measures to help people with some of the most commonly used consumer credit products (credit cards, loans and overdrafts) on 9 April 2020.

UK Finance

how "banking and mobile industries unite to tackle Covid-19 text message scams" (22 April 2020). The update notes that "A blacklist has been established to block messages from sender IDs that have been used to send scam texts, or from unauthorised variations that could be used to impersonate trusted brands and organisations in future. Over 400 sender IDs have been identified so far on the ever-growing blacklist, including 70 related to Covid-19"; and

details arising from law enforcement action. UK Finance reports "A specialist police unit funded by the banking industry has executed several warrants across the country in a crackdown on criminals sending scam text messages and emails exploiting the coronavirus outbreak" (19 April 2020).

Payment Systems Regulator

On 6 April 2020 the Payment Systems Regulator published the notes arising from a call with representatives from the payments industry and other authorities to discuss the progress being made on tackling authorised push payment scams. The Payment Systems Regulator notes "We want to see more done to reduce authorised push payment (APP) scams and protect victims. One of the key initiatives is the Contingent Reimbursement Model (CRM) Code and we are working with the industry, the Lending Standards Board and the Financial Ombudsman Service to understand how well it is working in the interests of consumers". The notes of the call can be found here.

Other AG Briefings

For more information in relation to the Coronavirus outbreak, see our website. Other articles include: